Senate budget writers putting final touches on spending plan

AUSTIN – A day after voting to spend billions of dollars on tax relief, Senate budget-writers on Thursday were tying up loose ends on their spending recommendations for the next two years amid continued urging that they do more to address crucial state needs.

"You can't cut $4.5 billion in taxes and leave here with a pension fund that has $7.5 billion unfunded liability," said Sen. Kevin Eltife, a Tyler Republican who a day earlier voted against nearly half the tax relief package.

"I don't know how a conservative or anyone can send back $4.5 billion and leave this kind of liability on the books," said Eltife, who has raised consistent concerns about addressing long-neglected state needs before implementing large tax cuts.

Sen. John Whitmire, D-Houston, said, "The fix is to spend more money" to set the system right.

Republican leaders pushing for big tax reductions say that in these relatively flush times for state government, they can meet Texas' needs and put some dollars back in taxpayers' pockets.

Senate Finance Committee Chair Jane Nelson, R-Flower Mound, said work will continue to address the liability at the Employees Retirement System and other issues. On Thursday, her panel agreed to add $635.6 million in funding to the pension system.

The Finance Committee has added big money in a number of areas to its starting-point budget for the next two years, although a final tally is not yet available. Thursday's action means budget staff will finalize figures before the measure gets a final committee OK and heads to the full Senate for consideration.

Some differences already are clear between Senate budget-writers' plan and the $209.8 billion, two-year budget proposal approved earlier this week by the House Appropriations Committee. A full House vote on its budget is expected next week.

After each chamber approves its spending plan, differences will be worked out by legislative negotiators.

Then Gov. Greg Abbott can use his veto pen to strike particular budget items or even kill the entire plan. He has said he will reject a budget that does not lower business taxes.

Spending on public education, transportation, tax cuts and border security are among the largest differences between House and Senate budget writers.

Both chambers plan on more than $4 billion in tax relief, but only the Senate has earmarked money for its plan in the budget at this point.

The House is still working out its tax-relief vision, while the Senate has OK'd its $4.6 billion plan for reductions in school property taxes and the business levy.

On public education, House leaders have proposed a $3 billion increase on top of covering enrollment growth, with an eye to reforming a school finance system that has been declared unconstitutional by a state judge. The case is on appeal, and a number of leading lawmakers would rather wait for a Texas Supreme Court ruling before making wholesale reforms.

Senate budget-writers would put $1.2 billion in general revenue into the basic student allotment over enrollment growth.

Both chambers also would put more money into transportation.

They agree on putting $1.3 billion into transportation by ending so-called diversions from the highway fund.

On top of that, House budget-writers would add $1.5 billion in general revenue for transportation.

Their Senate counterparts would instead draw $1.2 billion from a one-time dedication of the motor vehicle sales tax. The latter plan is in line with a larger Senate-backed initiative to dedicated a part of that tax revenue stream to transportation.

Both chambers also would add money to border security, but the Senate panel would put in more at $811 million, compared to $565 million on the House side.

Both figures far exceed the $343 million set aside by lawmakers for border security in the last legislative session in 2013. That figure that has grown to $467 million in the current two-year budget period.

Among other differences, the Senate Finance Committee has refused to fund the Racing Commission, which angered Nelson and other leaders by voting for a new form of electronic betting against their wishes.

The House Appropriations Committee provided funding for the commission in its proposed budget.

Peggy Fikac is Austin bureau chief and columnist for the San Antonio Express-News, delving into politics and policy in areas including the state budget, where the intersection of the two is compelling.

She covers Gov. Greg Abbott, who won the state’s top seat after a nationally noticed campaign against Wendy Davis; dug into Ted Cruz’s ascent to the U.S. Senate; covered George W. Bush as governor and during his races for president; and has bird-dogged Rick Perry’s tenure as Texas’ longest-serving governor, his White House ambitions and his indictment.

Peggy was bureau chief for the Houston Chronicle as well as the Express-News for more than five years when the two combined their Austin operations.

She previously worked for the Associated Press, where she covered the late Ann Richards during both of her campaigns for governor and specialized in public education and legislative coverage. Peggy also has been the correspondent for three Rio Grande Valley newspapers, starting as a senior at her alma mater, the University of Texas at Austin.